Annual global coal production rises for 12th year in a row<br/>/////////////////////////<br/>It is reported that total global coal production increased by 6.6% in 2011 and its 12th consecutive year of growth.
<br /> China overtook Japan as the world largest importer and Indonesia overtook Australia as the biggest global exporter. Meanwhile, global natural gas consumption increased by 2.1% in 2011 a significantly smaller increase than the 7.2% leap in 2010.
<br /> The figures come from the International Energy Agency which also found that the share of renewables in the total primary energy supply increased to 8.2% in OECD countries in 2011 compared to 7.8% in 2010.
<br /> The IEA found that the Fukushima nuclear disaster in Japan in March 2011 resulted in electricity production in OECD countries dropping by 0.9% in 2011 with nuclear electricity production falling 65 in Japan and 23% in Germany which initiated a withdrawal from atomic energy.
<br /> Mr Richard H. Jones IEA’s Deputy Executive Director has said that the way power is produced and consumed must change if the world is to respond to energy security challenges. He stressed there is no single solution that will combat climate change and address all of today other energy challenges.
<br /> He added that “There is no one magic bullet. There is no one technology you need, because the world is different in different places. In some places solar is great because the sun shines all the time in some places it’s really windy all the time, and that’s great for wind power. In other places the wind is too variable or the winds aren’t strong enough. You’ve got to do a real cradle to grave analysis.”
<br /> Source: Power Engineering International
<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Iron ore production sets record 2011<br/>/////////////////////////<br/>The world iron ore market achieved an all-time high for production in 2011 of 1.92 billion tons, up 4.7 per cent from 2010, UNCTAD’s Iron Ore Market 2011–2013 reports. World iron ore production continued to grow after the gradual post-crisis recovery of the global steel industry, as new mining capacity starting operation since May 2011 reached 125 million tons, the report indicates. Output of this commodity, vital for steel production, increased in most regions and countries except Europe (including CIS countries), where production stagnated, the report reveals.
<br /> Among the major producers, Australia increased production by 12.7 per cent, Brazil by 5.1 per cent, and China by 2.1 per cent.&nbsp; Production in India declined to an estimated 196.0 million tons in 2011, down 7.5 per cent.
<br /> In 2011, international iron ore trade reached a record 1.115 billion tons as exports increased for the tenth year in a row, the report says.&nbsp; Developing countries accounted for 49.5 per cent of total exports in 2011. Their exports of iron ore have grown by 104.8 per cent since 2002. 
<br /> The world recovery in crude steel production since the financial crisis has been almost entirely due to China, where production started increasing again in November 2008, and previous peaks in monthly production had already been matched by April 2009. Subsequently, China’s imports of iron ore increased by 11.0 per cent in 2011 compared with 2010, or to 686.7 million tons, and the country accounted for 60.1 per cent of total world imports, the report notes.&nbsp; Steel production elsewhere in the world was also growing though it had still not reached its pre-crisis production levels by the end of 2011. In Japan, imports of iron ore fell by 4.4 per cent to 128.4 million tons. Imports by the Republic of Korea increased by 15.3 per cent to 64.9 million tons.&nbsp; European imports (excluding the CIS countries) rose by 16.8 per cent in 2011, reaching 156.4 million tons, or just over 13.7 per cent of world imports.
<br /> Iron ore prices continued on an upward trend through most of 2011, the report says, as Chinese demand recovered and domestic Chinese iron ore producers were unable to keep up with this demand. Towards the end of 2011, however, prices declined in response to a slowdown in Chinese growth and the worsening economic outlook for European countries. During the first half of 2012, prices remained more or less constant at a level which, although high from a historical point of view, just allows high-cost producers, such as those in China, to break even, the report says.
<br /> With almost all iron ore producers and steel mills having abandoned the benchmark pricing system where prices were set once a year, there is widespread confusion about prices, the annual study notes. There are three competing published price indices (Metal Bulletin, Platts and The Steel Index (TSI), and other prices are published on an informal basis.&nbsp; The full effects of the new pricing mechanisms are still not clear, but the report considers it unlikely that the new models will have any major effect on price levels.&nbsp; It predicts, however, that price volatility will increase compared with the previous system, as new practices for price setting vary widely, and there are a large number of published prices and indices, each with a different product specification.
<br /> Meanwhile, hedging opportunities for iron ore are growing. The CME group, SGX ( Singapore Exchange), London Clearing House ( LCH.Clearnet), NOS Group and ICEX (Indian Commodities Exchange) all offer cleared swaps based on TSI iron ore transaction data, the report says. Despite the rapid growth in the range of possible derivatives trades, both iron ore mining companies and steel mills have so far been relatively slow to start using hedging facilities, with BHP Billiton believed to be the only large producer using swap markets. In 2011, iron ore swap volumes did not exceed 10 per cent of the spot market, the report estimates. Based on experiences from other markets, however, it is likely that modern price risk management instruments will in future play an increasingly important role in the iron ore market.
<br /> The three largest iron ore-producing companies, Vale, Rio Tinto and BHP Billiton (the last two with most of their production in Australia), together controlled 34.7 per cent of world production in 2011, the reports says. The market share of the “Big 3” decreased, albeit slightly, from 35.0 per cent in 2010, and their share is still lower than the peak of 36.4 per cent achieved in 2005. In total seaborne trade, the share controlled by the “Big 3” fell from 60 per cent in 2009 to 58 per cent in 2010 and then to 57.3 per cent in 2011.&nbsp; Brazil-based Vale remains the world’s largest iron ore producer at 323 million tons in 2011 – again an all-time high. Despite Vale’s production increase, its market share in 2011 was lower than the peak it achieved of 18.8 per cent in 2007.&nbsp; Corporate concentration in the iron ore industry at all levels – that is, among the largest, the three largest and the 10 largest companies – decreased, the report notes. All above-mentioned declines in market shares are the result of new production being started in many countries by smaller and also mid-sized producers, the report says.
<br /> As of May 2012, some 796 million tons of new production capacity was expected to come on stream between 2012 and 2014. Of this total, some 270 million tons falls into the category of “certain”, 220 million tons is termed “probable,” and 310 million tons is considered “possible,” the report notes.&nbsp; Some 28 per cent of these new projects are to be found in Oceania (Australia), 15 per cent in Latin America, 14 per cent in Africa, 20 per cent in Europe, 10 per cent in North America and 12 per cent in Asia.
<br /> On the basis of an unchanged relationship between iron ore demand and crude steel production, the report estimates that iron ore use will increase from 1.92 billion tons in 2011 to about 2 billion tons in 2012 and 2.08 billion tons in 2013.&nbsp; The report also estimates that the world iron ore market will be characterized by tight conditions for several years to come, although prices will decline as supply gradually adapts to continuously growing demand by way of additional new capacity. It says that prices, while declining slowly from 2013 onwards, will remain at levels that must be considered high from a historical perspective, with a floor at around $120 per ton delivered in China.
<br /> Source: Commodities-Now
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<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Chinese Steel Production and the Iron Ore Price<br/>/////////////////////////<br/>Is the chinese steel industry — and, by extension, the seaborne iron ore market — a train crash happening in slow motion?
<br /> Some are beginning to believe this is the case.
<br /> Bucking pretty much the whole global commodities trend, iron ore prices in Asia have risen 4.7 percent in the past two weeks to $139.25 per metric ton for 62% Australian iron ore, the highest since early May and in stark contrast to crude oil, which has fallen 7 percent over the same period on the back of widespread fears of a global slowdown and a rise in risk aversion.
<br /> The FT suggests the iron ore market is supported by the marginal cost of production in China (said to be around $130 per metric ton) but that doesn’t explain the strength of prices or the stockpiling. For that we have to look at steel production, particularly in China, which has been running at record levels, rising 2.5 percent in May to 61.2 million tons.
<br /> Indeed, it is rising Chinese production that’s behind much of the 1.8 percent increase in global production during March and 1.2 percent increase in April, according to Reuters. Steel production in Japan was up 2 percent to 9.2 percent and in the US by 7.4 percent year-on-year in May to 7.7 million tons, but both are a fraction of China’s output.
<br /> The European Union by contrast fell 5.5 percent to 15.3 million tons and Brazil has been bemoaning the level of (mostly Chinese) imports undermining the home market for steel products, falling by 11 percent in May.
<br /> China meanwhile is continuing to produce steel in record quantities with the surplus going overseas. Exports hit an all-time high of 5.23 million tons in May as domestic finished steel prices appear to be easing with Baosteel recently announcing a price reduction. The HSBC Flash Purchasing Managers Index, the earliest calendar indicator of China’s industrial activity, slid to a seven-month low of 48.1 in June, with exports, the construction industry and automotive all showing signs of a sharp slowdown.
<br /> You have to ask: with just about all other commodities in decline, with so much uncertainty impacting investment decisions and the threat of Europe slipping into recession (German manufacturing has slumped to a three-year low, according to Markit Economics), how long can Chinese steel production buck the trend and continue rising?
<br /> Beijing does not seem ready to let the construction sector loose as it did in 2009, so where is the demand for all this steel going to come from? Rising exports are not the answer. They are already causing trade tensions and demand in most markets is stagnant or falling with the exception of the US. With exports at less than 10 percent of total Chinese production, the country’s steel producers could afford to dump excess steel overseas providing they made a profit on metal consumed at home, but neither Europe nor the US is going to stand by and allow that to happen.
<br /> The logical conclusion has to be that Chinese steel production, and by extension iron ore consumption, must slow in the second half with a corresponding fall in prices; the longer the current situation prevails, the greater the likely reaction will be and steeper the price falls.
<br /> Source: Metal Miner<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Asia's rice mountain to pressure prices as buyers lose appetite<br/>/////////////////////////<br/>Asia's bulging stocks of rice, coupled with the waning appetite of top buyers, will keep a lid on prices of the grain in coming months, promising relief to food importers grappling with a one-third jump in the prices of corn and wheat since mid-June.
<br /> Top rice exporters India and Thailand are sitting on hefty stockpiles of the grain ahead of new crop harvests, while leading buyers Manila and Jakarta are likely to reduce purchases amid bumper domestic crops.
<br /> A limit on rice prices will ensure sufficient supplies for some of the poorest nations in Asia and Africa, all but ruling out the kind of panic buying seen in 2008, when fears of supply shortfall drove Thai rice RI-THWHB-P1 to all-time highs of $1,000 a tonne.
<br /> &quot;The dynamics are totally different -- rice is not going to go the way corn, soybeans and wheat have gone,&quot; said Darren Cooper, a senior economist at the International Grains Council in London. &quot;It is the picture we see on the supply side which is really bearish for the market.&quot;
<br /> The council, a research body funded by buyers and producers, expects world rice trade in 2012 to fall about 4.7 percent on the year, to around 34 million tonnes, as top buyers reduce purchases because of the better yields brought by good weather.
<br /> Thailand, usually the world's biggest rice exporter, is estimated to have accumulated a record 10 million tonnes of rice, or nearly a third of annual global trade, after a government intervention scheme made exports unviable.
<br /> In a populist move designed to shore up its support, the Thai government bought rice from farmers at prices on average 40 percent higher than prevailing market rates, stuffing the country's silos with grain that has proved difficult to sell as supplies pile up elsewhere.
<br /> In India, stocks of rice stood at 30.7 million tonnes on July 1, enough to meet world demand for almost a year, despite the country having sold some 5 million tonnes since last September.
<br /> That is driving down prices.
<br /> Actively-traded 25 percent broken Vietnamese rice is being offered around $377.5 a tonne, down 16 percent since the beginning of the year. Indian common rice varieties are quoted around $375 to $425 per tonne, making exports attractive.
<br /> In contrast, benchmark Chicago corn and wheat have surged close to 40 percent in the last four weeks as a worsening drought in the U.S. grain belt curbs yields with each passing day.
<br /> DESPERATE TO SELL
<br /> Thai authorities are desperately seeking buyers for their rice before new-crop supplies start flowing in from October and the country is left with few options but to sell at a discounted prices in government-to-government deals.
<br /> &quot;They have to sell in order to make space before new supplies start,&quot; said one trader from Bangkok. &quot;Everyone is waiting to see what they do.&quot;
<br /> But the Thai government sold none of the 250,535 tonnes of rice offered from its stocks in a tender last month.
<br /> As Thailand sits on its expensive rice, Indian exporters will capitalise on the situation, even if the country receives sparse rainfall from the monsoon season now underway.
<br /> &quot;Indian supplies will continue even if the monsoon rains fail this year as the rice stocks are really huge,&quot; said Vijay Setia, former president of the Rice Exporters' Association of India.
<br /> Traders in Vietnam expect rice prices to stay under pressure as domestic supplies rise and India continues exports. &quot;Prices in Vietnam will depend on Indian rice and only have a chance to rise if India stops exporting,&quot; said one trader at a foreign firm in Ho Chi Minh City.
<br /> Indonesia is unlikely to import rice in 2012 and is forecast to have a surplus of 5.5 million tonnes of the staple by year's end, state procurement agency Bulog said this month.
<br /> The Philippines, which was the world's largest rice importer in 2010, aims to be self-sufficient in rice by the end of 2013.
<br /> &quot;Next year, I think we could reduce rice imports to not more than 100,000 tonnes, just enough to make sure we have ample stocks at the National Food Authority,&quot; said Dante Delima, head of the government's National Rice Programme.
<br /> Source: Reuters<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>SAIL's July production up 6% to 1.2 MT<br/>/////////////////////////<br/>Steel Authority of India (SAIL) on Saturday said its production increased by 6 percent in July to 1.2 million tonnes (MT).
<br /> &quot;SAIL has produced 1.2 MT of hot metal in July 2012, registering a growth of 6 percent over the corresponding month last year... The higher production levels got a further boost in July, with improved techno-economic parameters,&quot; the state-owned firm said in a statement.
<br /> The company, however, did not provide comparative figures for the corresponding month of last year.
<br /> Besides, its crude steel production was up 4 percent to 1.13 MT during the last month, while the saleable steel production was 1.06 MT, registering a growth of 3 percent, it added.
<br /> Besides, its blast furnace productivity, a critical parameter of production efficiency, was up by 6 percent last month over performance in July, 2011.
<br /> Source: PTI<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Commodity prices mostly fall on lack of stimulus action<br/>/////////////////////////<br/>Global commodity markets mainly fell in subdued trade this week as investors expressed disappointment at the lack of central bank action to kick-start the struggling global economy.
<br /> European Central Bank (ECB) President Mario Draghi announced no immediate action on the eurozone sovereign debt crisis on Thursday, despite insisting the previous week that he would “do whatever it takes to preserve the euro.”
<br /> Markets also stumbled after the US Federal Reserve opted against more quantitative easing stimulus measures on Wednesday.
<br /> However, oil prices jumped on Friday as data showed that the US economy created 163,000 jobs last month. Analysts had expected a gain of 100,000 jobs in the US, which is a major consumer of many raw materials.
<br /> OIL: Prices staged a late rally as the positive US non-farm payrolls data signaled healthy demand in the world’s biggest oil consuming nation.
<br /> A weaker US currency makes dollar-denominated oil more attractive to buyers using stronger currencies, tending to lift crude demand and prices.
<br /> Oil also found support this week from geopolitical tensions surrounding key producer Iran.
<br /> US President Barack Obama on Tuesday imposed new economic sanctions on Iran’s oil export sector and on a pair of Chinese and Iraqi banks accused of doing business with Tehran.
<br /> Oil also rose following a sharper-than-expected drop in US crude stockpiles.
<br /> By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in September jumped to US$108.58 from US$105.94 a week earlier.
<br /> On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for next month rallied to US$91.02 from US$89.90 a week earlier.
<br /> PRECIOUS METALS: Gold fell back, dragging other precious metals lower.
<br /> By late Friday on the London Bullion Market, gold dropped to US$1,602 an ounce from US$1,618.25 a week earlier.
<br /> Silver declined to US$27.25 an ounce from US$27.73.
<br /> On the London Platinum and Palladium Market, platinum dropped to US$1,390 an ounce from US$1,410.
<br /> Palladium eased to US$573 an ounce from US$574 an ounce.
<br /> BASE METALS: Prices were hit by downbeat Chinese data, with nickel diving to US$15,236 — its lowest since mid-July 2009.
<br /> China’s manufacturing activity weakened to an eight-month low last month when the purchasing managers’ index (PMI) slipped to 50.1 last month from 50.2 in June, according to a statement released by the Chinese National Bureau of Statistics.
<br /> By late Friday on the London Metal Exchange, copper for delivery in three months dipped to US$7,384 a tonne from US$7,537 a week earlier.
<br /> Three-month aluminum slipped to US$1,854 a tonne from US$1,888.
<br /> Three-month lead edged down to US$1,875 a tonne from US$1,900. Three-month tin declined to US$17,750 a tonne from US$18,035. Three-month nickel slid to US$15,528 a tonne from US$15,930. Three-month zinc dropped to US$1,827 a tonne from US$1,840.
<br /> Source: AFP<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Upgrade or get out, Indonesia tells miners<br/>/////////////////////////<br/>Indonesia is prepared to suffer a drop in mining exports as it seeks to force firms to invest in processing ores into refined metals, part of the government's long-term strategy to upgrade Southeast Asia's largest economy, its trade minister said.
<br /> New rules slapping an export tax on ore shipments and requiring miners to submit plans for smelters led to a slump in June mine exports, as firms halted operations and laid off hundreds of thousands of workers. So be it, says Gita Wirjawan.
<br /> &quot;I don't want my kids to just be coal exporters. I want them to be able to make something,&quot; Wirjawan, the father of three school-age children, told Reuters in an interview on Thursday. &quot;My trade policies are geared towards being able to climb up the value chain.&quot;
<br /> Indonesia is the world's top exporter of coal for power stations and of nickel and tin, as well as a major supplier of bauxite, iron ore, gold and silver. Most metal is exported as ore to be refined in countries such as China, Japan and United States. About 70 percent of its total exports are commodities.
<br /> Now, Indonesia wants to change that by refining the ore domestically and then either shipping finished metals overseas for much higher prices or to profit further by manufacturing them at home into steel or iPads - just as its Asian peers do.
<br /> &quot;Everyone around you in ASEAN, everyone around you in Asia-Pacific, knows how to make Blackberries, handphones, plasma TVs. We can't even make stuff like that,&quot; said Wirjawan, adding that the nation's tech graduates could do it with capital and the right policies.
<br /> ORE EXPORTS SLUMP
<br /> For now, the May rules forcing miners to prepare for a total ban on raw ore exports from 2014 has spawned industry chaos. June exports of nickel ore slumped 80 percent and copper ore exports slid 90 percent, Trade Ministry data shows.
<br /> &quot;It's not like we're happy taking a hit on exports of metals and minerals... if this were to further encourage more investment in the downstream, it would be good for the future of Indonesia,&quot; Wirjawan said.
<br /> Mining associations say activity has been halted as firms are facing a bureaucratic backlog to get their refining plans approved for an export recommendation from the Ministry of Energy and Mineral Resources, and they then need an export license from the Trade Ministry.
<br /> Wirjawan admitted there was a licensing backlog and has created a centre in his ministry to handle it, though it was empty when Reuters visited.
<br /> Previously, mining licenses were given out by local mayors, a process prone to corruption, miners and graft experts say. Now industry insiders say the state is trying to direct that revenue to Jakarta at a time when the country's major political parties are seeking to raise funds for a wide-open presidential election in 2014 that will determine the direction of the world's fourth most populous nation.
<br /> Wirjawan said to let him know if any corruption was found.
<br /> NO LONGER A GOLDEN BOY
<br /> Even once the license backlog is cleared, miners say it will be impossible for Indonesia to build enough smelters within two years to process all its ore, and in any case, there is sufficient global smelting capacity. But the government would rather halt mining than run down its ore reserves this decade.
<br /> &quot;We sent out a message very clearly at the end of 2009 with the mining law... And now you call me a protectionist? There's a lot of hypocrisy out there,&quot; said Wirjawan, referring to the law the new rules are based on and responding to widespread criticism that his policies have been nationalistic.
<br /> Wirjawan, a former JPMorgan banker with a master's degree from Harvard, won plaudits from the foreign community during his previous tenure as chief of the country's investment board. He successfully promoted Indonesia and oversaw a sharp rise in investment.
<br /> He was rewarded with a promotion to the cabinet and swapped suits for a bureaucratic uniform late last year. An accomplished musician, Wirjawan moved to reinvigorate the Trade Ministry, occasionally playing a new piano in the lobby and spiffing up the building with fresh flowers.
<br /> But the trade and mining policies have led many foreigners to see him as a compromised symbol of the young democracy's stifled reform process.
<br /> &quot;Headline: No longer a golden boy,&quot; remarked Wirjawan, drawing an imaginary news headline in the air.
<br /> STILL ATTRACTING INVESTORS
<br /> Despite the foreign disappointment, given President Susilo Bambang Yudhoyono is in his final term and has no obvious successor, some analysts see the 46-year-old Wirjawan as a possible candidate for president in 2014.
<br /> Wirjawan refused to be drawn on his future ambitions. But he said he and the government were taking a long-term view.
<br /> &quot;We've got the next 20 to 30 years... We've got 250 million people and we're gonna stay young for a long time. More so than ever, the smart investors pay a little bit more premium on demographics,&quot; he said, referring to the economy as &quot;damn sexy&quot;.
<br /> The new trade and mining rules certainly do not seem to have hampered foreign investment so far, and in fact may be driving it with a slew of projects submitted on paper to build smelters. In the second quarter, foreign direct investment was up 30 percent from a year earlier, led by mining.
<br /> Nevertheless, many small-scale miners, both local and foreign, in far-flung islands in the archipelago such as Sulawesi, have given up because they do not want to build multi-million dollar smelters and as the new 20 percent tax on raw ore exports is killing their margins, executives say.
<br /> &quot;Perhaps they are not the kind of miners we want in Indonesia,&quot; Wirjawan said. &quot;We want people who are willing to take the long-term view.&quot;
<br /> Source: Reuters
<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Iron ore crunch spreading in Karnataka<br/>/////////////////////////<br/>Business Standard reported that the shortage of iron ore supply from Karnataka is posing a challenge to steel and pellet making plants to maintain their production levels. 
<br /> Steel companies, such as BMM Ispat Ltd, Kalyani Steels, Kirloskar Ferrous Industries Ltd and pellet making companies like MSPL Ltd, Sesa Goa and Dempo, facing acute ore shortage, hold raw material inventory for just 20 to 45 days.
<br /> With barely three million tonnes of ore left of the 25 million tonnes reserved for e auctions in the state, these companies might have to either close operations or look for high cost ore from other states if mining does not resume immediately in Karnataka. 
<br /> BMM Ispat operates a 2.4 million tonnes per annum steel plant at Hospet and requires 4 million tonne of ore per annum. It currently has stock for two months. BMM Ispat is planning to bring ore from Chattisgarh and Odisha. A company spokesperson said that “Our executives are talking to the miners in these states. We are also working out the pricing as well as logistics. We have to incur an additional cost of INR 5,000 per tonne if we bring ore from outside. The company board has to take the final decision before we start buying ore from there.”
<br /> Kalyani Steels, which operates a 700,000 tonne steel plant, also in Hospet, is currently operating at a third of its capacity. Mr R K Goyal managing director of Kalyani Steels said that “Only one of our three furnaces are in operation. At this rate, we can manage production for just a month and if mining does not resume by the end of this month, we will be in big trouble. We are also exploring the possibility of bringing ore from Jharkhand and Chattisgarh, which is very expensive.”
<br /> MSPL operates a 1.2 million tonnes per annum pellet plant in Koppal and requires 4,000 tonnes of iron ore per day. It cannot use ore of less than 62%t Fe grade. Meda Venkataiah ED of MSPL Ltd said that “It is a tough time. The quality of ore in the auction is poor. Since these have a high percentage of alumina and silica, we cannot use these to make pellets. We don’t have enough stocks and can manage for just about a month.”
<br /> Kirloskar Ferrous Industries Ltd, which operates a 500,000 tonne per annum plant to produce iron castings and foundry grade pig iron, is also considering importing ore from other states. A company official said that “The high logistics cost doesn't make it a viable option to bring ore from other states. We have stocks for a month and hope mining will restart by then. If not, we have another option of using pellets or bringing ore from other states.”
<br /> Mr Basant Poddar vice chairman of Federation of Indian Mineral Industries South said that “The mid size and small steel mills are under huge financial stress as they are forced to buy ore at e-auctions paying higher cost. They would also face more financial difficulty if they are to bring ore from other states.”
<br /> Source: Business Standard<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Wheat rises on dollar, better outlook than corn<br/>/////////////////////////<br/>A falling dollar and better outlook compared to corn and soy supported a 3% rally in wheat futures Friday.
<br /> September wheat WU2, the most active as well as the front-month contract, gained 29 cents, or 3.2%, to trade at $8.92 a bushel on the Chicago Board of Trade. It was followed by December wheat WZ2, up 27 cents, or 3%, to $9.02 per bushel. 
<br /> “Wheat is a world market, and our competitiveness on that scale is influenced by the dollar,” said Jason Britt, an analyst for Central State Commodities in Kansas City, Mo. With the dollar dropping Friday, “wheat is probably getting a little more attention.”
<br /> The ICE dollar index DXY, which compares the dollar to six major rival currencies, fell about 1% on Friday after the U.S. Labor Department’s better-than-expected jobs report, and as the euro EURUSD made gains on the dollar. 
<br /> Wheat is also less affected by the weather, which has decimated the corn crop across the Midwest. According to the U.S. Drought Monitor, 79% of the contiguous U.S. is experiencing drought conditions from “moderate” to “exceptional.” This has been disastrous for corn, which needed water earlier in its growing season. Corn yields have fallen, prices have spiked, and farmers, as well as investors, have searched for other crops to feed cattle and hogs. The corn market has faced tight supply and demand due to processed foods and ethanol industry needs.
<br /> On the other hand, the wheat crop has been less affected by the weather, in part because it is more hardy, and also because some of the crop has yet to be planted. 
<br /> “Moisture is a concern, but you know, of all three markets, it is the least sensitive to the rain,” said Britt. 
<br /> That doesn’t mean wheat won’t eventually have to face the heat and dry conditions, however. 
<br /> “It’ll become more of concern as you get it planted,” Britt said. 
<br /> Wheat usually has two growing seasons. Wheat planted in the spring, called spring wheat, is ready for harvest as early as May, and is harvested throughout the summer, depending on where and when it was planted. Wheat planted in the late summer to early fall, called winter wheat, is ready for harvest in September and December. Because it has a shorter growing season, and because it is a hardier crop than corn and soybeans, farmers have some leeway in deciding when to plant and when to harvest it. 
<br /> Because corn and soy grow in the summer, they have been hit hard by high temperatures and drought conditions. However, spring wheat has been able to avoid some of that damage because it was ready for harvest earlier, and winter wheat has either just been planted, or is not yet planted. 
<br /> December corn contracts CZ2, the most active, gained 15 cents, or 1.9%, to trade at $8.11 a bushel on the Chicago Board of Trade. Front-month September contracts CU2 were up 18 cents, or 2.2%, at $8.12 per bushel. 
<br /> November soybean contracts SX2 , the most active, were up 14 cents, or 0.9%, to $16.31 per bushel on the Chicago Board of Trade. 
<br /> Source: MarketWatch
<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Iran, first world steel producer in 1st half of 2012: IMIDRO<br/>/////////////////////////<br/>Iran's Mines and Mining Industries Development and Renovation Organization (IMIDRO) has announced that the Islamic Republic led the world's steel producing states in the first half of 2012 by producing over 7.3 million tons of steel.
<br /> The latest report published by IMIDRO announced that Iran's steel production has indicated a 9.5 percent growth in the said period from among the world's 20 steel producing states.
<br /> It added that the total amount of the world's steel production in the first half of 2012 stood at 765.8 million tons.
<br /> During the said period, added the report, Turkey (with a growth of 9.3 percent), the US (8.4 percent), Canada (6.5 percent) and the non-EU members of the Europe (5.8 percent) have followed Iran, respectively, winning the second to fifth places of the world's top producers of the strategic product.
<br /> IMIDRO is a major state-owned holding company active in the mining sector in Iran with eight major companies and 55 operational subsidiaries active in steel, aluminum, copper, cement and mineral exploitation fields.
<br /> Source: IRNA<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>August steel scrap US price settlements much higher than July<br/>/////////////////////////<br/>More US scrap price negotiations for August steel mill requirements were concluded through Friday with prices surpassing July's low levels by wide margins -- and in some cases -- also exceeding June pricing, market players told Platts. 
<br /> Supply-side issues pushed up prices for August scrap volumes, and by the time most negotiations were well under way on Wednesday, price offers were heard to be $50-70/long ton higher than early-July prices. 
<br /> The price of benchmark ferrous scrap averaged $431.36/lt delivered to Midwest mills in May, $374.29/lt in June, and $336.90/lt in July, based on Platts market data. 
<br /> On Friday, the Platts daily assessment for shredded scrap moved up $42.50/lt to $405-410/lt delivered Midwest US mill with shredded being sold for as high as $425/lt in the Southeast. 
<br /> Prices for other grades settled at $410-415/lt for No 1 busheling, $390-395/lt for plate &amp; structural scrap and $350-355/lt for heavy melting scrap, all delivered Midwest mill, according to market participants. 
<br /> Deals for shredded scrap in the Ohio/Pennsylvania area were reported at $400/lt earlier in the week, but had moved up to $410/lt by Thursday. 
<br /> &quot;Pricing is just all over the place based on different buy programs,&quot; one East Coast scrap trader said. 
<br /> An eastern US-based scrap yard source added, &quot;We are riding the coattails of the steel industry. When they are running over 70-75%, there is demand and I think operating rates have been pretty consistent, but it is the supply end of things causing the [August] spike in the market -- this is an inventory issue.&quot;
<br /> Source: Platts<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Indonesia issues more mining export permits after June slump<br/>/////////////////////////<br/>Indonesia has awarded mineral export permits to 55 companies since it introduced curbs on such shipments this year, a trade ministry official said, after the limits triggered a slump in June exports to key customers Japan and China.
<br /> Indonesia, a major exporter of metal ores, in May imposed new rules on mining exports, including a 20 percent export tax. To obtain export permits under the new rules miners must now be certified &quot;clear and clean&quot; and provide plans to process ores they dig up, ahead of a 2014 ban on unprocessed ore exports.
<br /> Of the 55 companies that have gained permits, 32 are nickel ore miners, 6 are iron ore miners, 2 are copper ore miners and 10 are bauxite miners, said Deddy Saleh, director general of foreign trade at the Trade Ministry.
<br /> In early July, the number of approved firms stood at 22, as the slow approval rate saw ore exports slump up to 90 percent.
<br /> Miners that have already received export permits include Newmont Mining Corp, PT Aneka Tambang, Freeport McMoRan Copper &amp; Gold Inc, PT Sebuku Iron Lateritic Ores and PT Sambas Mineral Mining.
<br /> Indonesia's push to develop domestic mineral processing industries aims to derive more revenue from a sector that already contributes around 12 percent of GDP.
<br /> The disruption to Indonesian exports, however, is estimated to be costing the mining industry up to $164 million a month in lost sales of nickel and bauxite, and has led to mass layoffs across the country.
<br /> Source: Reuters
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<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Saudi oil exports hit 1.59 bn barrels in 7 months<br/>/////////////////////////<br/>Saudi Arabia exported nearly 1.59 billion barrels of crude oil in the last seven months worth SR 657.2 billion, an economic expert said.
<br /> According to Fahad bin Jumaa, local consumption stood at 535.6 million barrels, or 25 percent of total production.
<br /> He said Saudi Arabia's oil production is still running within the range of 10 million barrels per day (bpd) based on the improved price of Arabian Light crude in July compared to June and coupled with the continued decline of Iran's oil production to 3.2 million bpd (based on International Energy Agency's data) in June.
<br /> Iran's oil production dropped by 0.62 percent in July following sanctions imposed by European Union (EU) countries on the country, he said.
<br /> He said the Kingdom remains the largest oil exporter to China, whose exports jumped by 26.1 percent or 1.2 million bpd due to the improvement of downstream industries in July in the country.
<br /> However, China's economy, as seen by the International Monetary Fund (IMF), needs further reform and its currency has to be rebalanced to achieve better growth and minimize risks, he said.
<br /> Economic analyst Naif Al-Eid said global expectations will reflect the fluctuations of oil prices during the coming days, but will not go below $ 100 per barrel price preferred by oil producing countries.
<br /> The increased risk produced by the closure of the Hormuz Strait (by Iran) and possible application of incentive plans in the US and European economies will make it difficult to keep oil prices below $100 per barrel, he said.
<br /> Meanwhile, a report released by Petroleum Policy Intelligence (PPI) said Saudi Arabia increased its oil production to 10.3 million bpd in July, an increase of 445,000 bpd compared to May figures.
<br /> The Kingdom's actual production rate was 10.1 million barrels a day in June, compared with 9.8 million in May, the PPI report said.
<br /> What is affecting the price of oil currently are geopolitical factors rather than purely technical reasons, and a proof of that is the move of OPEC countries to increase oil production with continuation of oil prices above $ 100 per barrel, the report said.
<br /> Source: Arab News<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>US LNG exports have no price advantage in Europe -Deutsche Bank<br/>/////////////////////////<br/>Potential future U.S. exports of liquefied natural gas (LNG) would have no price advantage over European hub prices and therefore cannot directly displace gas into Europe, Deutsche Bank said.
<br /> The first U.S. LNG exports are expected to come from the Sabine Pass terminal from 2016, and its export price will involve a 15 percent premium to the U.S. Henry Hub natural gas trading hub, along with a fixed capacity charge of $2.25-3.00 per million British thermal units (mmbtu).
<br /> With the addition of transport and liquefaction charges, U.S. LNG exports would not have a price advantage at Britain's National Balancing Point (NBP), Europe's benchmark gas trading hub, Deutsche Bank said.
<br /> &quot;Comparing U.S. LNG exported to Europe with UK NBP gas prices shows that the price advantage would be virtually nil over the 2016-2020 period,&quot; Deutsche Bank said in a research note.
<br /> &quot;So U.S. LNG exports cannot directly displace gas into Europe but could free up flexible LNG supplies, which otherwise would have been imported into Asia.&quot;
<br /> Deutsche Bank estimated U.S. LNG exports would cost $9 to $10 per mmbtu between 2016 and 2018, similar to its estimates for NBP hub spot gas prices.
<br /> But the bank warned that LNG supplies might become more inflexible after Qatar, the world's dominant LNG exporter, successfully renegotiated new long-term deals during the past year.
<br /> &quot;Given the success with which Qatar has contracted for firm demand on an oil-indexed basis in the last year, there may be less flexible volume available to the market in 2017-2020 than there was over the 2010-2011 period, depending on the volume of U.S. LNG export ultimately approved by government agencies,&quot; the bank said.
<br /> Four LNG export terminals in the United States have so far secured customer interest, and their total capacity would be around 48 million tonnes per year, but analysts have said they expect the United States to cap its LNG exports to ensure low gas prices for its domestic industry. 
<br /> Source: Reuters
<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Coal exports could add $2B to $6B annually to U.S. economy<br/>/////////////////////////<br/>Business groups backing Pacific Northwest coal export proposals on Thursday lauded a new report that claims increased U.S. coal exports could bring between $2 billion and $6 billion per year to the U.S. economy.
<br /> The report comes from the Energy Policy Research Foundation, a Washington, D.C.-based think tank that focuses on oil-related economic issues.
<br /> Around a half-dozen proposals have arisen in Washington and Oregon this year to build export terminals that would shuttle coal from the Powder River Basin of Montana and Wyoming to energy-hungry Asian markets through the Pacific Northwest. Three projects proposed along the Columbia River near Portland represent around $1 billion in private investment.
<br /> Proponents laud the economic potential of the projects — Portland barge-makers Gunderson LLC and Vigor Industrial already plan to split $75 million worth of work related to one proposal. But critics are fighting coal exports primarily on two fronts — that they will lead to widespread rail congestion and that any economic gains aren’t worth the damage caused from enabling the increased use of greenhouse gas-emitting power sources.
<br /> The Energy Policy Research Foundation report dismissed the criticism.
<br /> It called the rail traffic issues “state and local concerns which can be addressed through a number of remedies.”
<br /> On the larger environmental issue, the report claims that lower-cost coal from the Powder River Basin isn’t likely to have an effect on coal prices worldwide and neither the volume of world coal combustion or greenhouse gas emissions would change as a result.
<br /> Ross Macfarlane, senior adviser for business partnerships at Seattle-based environmental policy group Climate Solutions, said that economic assertion not only isn’t accurate, “it’s in direct opposition to what’s happening in world markets.”
<br /> “U.S. coal is moving prices significantly downwards because it is supplanting, in the short term, higher-priced coal from Australia and Indonesia and causing major dislocations,” Macfarlane said.
<br /> The report's claim “goes against the basic laws of supply and demand,” he said.
<br /> The report was heralded by the Alliance for Northwest Jobs &amp; Exports, a business-backed, pro-coal nonprofit based in Seattle that made its debut last week.
<br /> “This report confirms what we already know in the Northwest – we can continue to build on our strong trade heritage, creating thousands of new jobs and millions in new tax revenue for our region, and do it in an environmentally responsible way,” Alliance spokeswoman Lauri Hennessy said in a news release.
<br /> Macfarlane said he doesn’t dispute that coal exports will lead to billions of dollars coming into the U.S. economy.
<br /> “The question is who will get that value,” he said. “I think it’s clear that most of that value is going to be going into a very small number of pockets and the costs will be borne throughout the region and the world.”
<br /> Source: Sustainable Business Oregon
<br /><br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Russia fans export fears with cut in harvest outlook<br/>/////////////////////////<br/>Russia's Agriculture Ministry signalled a worsening outlook for the harvest, sharpening parallels with the 2010 season when Moscow shocked grain markets with a snap decision to ban exports after weeks of official reassurances.
<br /> While this year's drought has been less dramatic, without the choking smog that engulfed the capital, markets are on edge because they are uncertain of the tack Russian authorities will take after the surprise halt two years ago.
<br /> Part of the concern comes from what are perceived to be conflicting signals from Russian officials on the size of the harvest after a number of crop downgrades and authorities' insistence that there will be an exportable surplus.
<br /> &quot;They are playing cat and mouse a little with the market. We don't view these official figures as very credible,&quot; said Pierre-Antoine Allard, analyst with French grains consultancy Agritel.
<br /> Much has changed in Russia in two years. In particular, it has won accession to the World Trade Organisation, limiting its room for manoeuvre on trade issues, and its scope to beat back the price inflation that has plagued the Russian economy since the collapse of the Soviet Union.
<br /> But in a further sign that Russia still has a long way to go to regain the trust of world grain markets after the 2010 ban, Russian government efforts to reassure grain markets have only fanned speculation on export limits via protective tariffs or administrative measures, if not an outright ban.
<br /> &quot;They are used to doing whatever suits them,&quot; a European grain trader said. &quot;Everything is possible but what's certain is that their concern will be to protect their domestic market.&quot;
<br /> An Agriculture Ministry official signalled on Thursday that a further cut in Russia's harvest forecast to 70-75 million tonnes was in the offing, two days after Prime Minister Dmitry Medvedev announced the crop would be lower than previously expected.
<br /> Visiting Volgograd, a provincial capital in the Volga River valley where drought is spreading and threatening yields, Medvedev had announced a new government forecast of 75-80 million tonnes - a 5-million-tonne cut in the range.
<br /> He said Russia would still retain an exportable surplus and that domestic needs - which average 70 million tonnes per year - would be amply covered with new crop grain and stocks.
<br /> A government source said this week that under a maximum forecast of 80 million tonnes, Russia could produce up to 50 million tonnes of wheat.
<br /> &quot;Eighty million tonnes was the optimistic forecast. I think it will decline and go to a figure of 70-75 million tonnes,&quot; Deputy Agriculture Minister Alexander Chernogorov was quoted as saying on Thursday at a conference in Novosibirsk, the provincial capital of another drought-hit region in Siberia.
<br /> &quot;This trend is present,&quot; he said.
<br /> A 70 million tonne harvest would be about level with average annual consumption and four million tonnes more than the harvest of 2010. But a leading Russian grain analyst said a cut in forecasts to 70 million tonnes would go too far.
<br /> Andrei Sizov Jr., managing director of the SovEcon consultancy, said 75 million tonnes was &quot;a decent forecast.&quot;
<br /> &quot;Just because they banned exports then doesn't mean they are going to ban exports now. I don't understand this logic,&quot; Sizov said. &quot;For one thing the harvest will be 10 million tonnes more.&quot;
<br /> SURPRISE
<br /> Still, Chernogorov's comments seemed to accelerate a possible scenario for export restrictions in which the harvest outlook declined and piled pressure on the government to act.
<br /> &quot;There is concern that the Russian government is quoting figures the market views as wrong which could lead to export restrictions if the authorities are surprised by tight supplies,&quot; a German trader said.
<br /> &quot;Medvedev's figures in his statement this week are clearly wrong and were misinterpreted,&quot; the trader said.
<br /> Medvevdev's deputy, Arkady Dvorkovich, reiterated the 75-80 million tonne forecast on Thursday and said Russia could export 10-12 million tonnes of grain.
<br /> He said the current pace of export - much slower than last year's flood of exports when Russia lifted the export ban on July 1, 2011 - posed no immediate risk to inflation targets or domestic food supplies.
<br /> &quot;Exports are now running at a moderate pace and will be below the 2011 level,&quot; Dvorkovich told a briefing after a government meeting on Thursday.
<br /> Dvorkovich said a spike in grain prices on the back of drought in the United States and Russia posed some inflationary risk.
<br /> &quot;On the whole consumer price inflation will stay within the forecast range,&quot; he added.
<br /> He did not comment directly on the possibility of export restrictions but said demand for feed grain was likely to regulate itself.
<br /> &quot;The latest statement from the deputy prime minister seems to show the government is pulling back from its optimism. Their official statements still leave open the possibility of some form of export restrictions,&quot; the German trader said.
<br /> Source: Reuters<br/>------------------------------------------------------------------------------------------------------------------------------------------------------------<br/>Reducing dependence on imported fuel: PSO to produce petro-diesel by 2015<br/>/////////////////////////<br/>The Pakistan State Oil (PSO) has planned to introduce petro-diesel (B-5) product with the blend of 5 percent bio-diesel by 2015 in order to reduce reliance on imported petroleum products.
<br /> The petro-diesel production will be increased gradually with addition of bio-diesel components by 10 percent into diesel up to 2025, the PSO official said.
<br /> Pakistan’s total demand for high speed diesel (HSD) is around 8.0 million tonnes per annum, half of which is imported to meet the demand. With 10 percent blending of bio-diesel import volume could be reduced by 800,000 tonnes, which would certainly reduce burden on the national exchequer. Petro-diesel would also assist in enhancing environment conditions, resulting in reduced chances of diseases caused through smoke emitted from cars’ engines.
<br /> The state-owned oil marketing company also plans to test the market with blended bio-diesel by mid of 2013. In this regard, a study based on negotiations with consumers is underway, who use diesel for electric generation for product usage.
<br /> The company is currently using transesterification technology to produce bio-diesel with production plant capacity of 70 litres per day. PSO has completed the project lifecycle at present, like, complete process from seed sowing to its application has been completed.
<br /> Bio-diesel blend or petro-diesel (B-10) can be used in all sorts of diesel related engines. PSO has been testing it in-house in dedicated vans for blended bio-diesel (B-10), which has completed more then 44,000 kilometres while we are also using it on our 10 KVA diesel generator set and has completed 800 hours of successful operations.
<br /> In pursuance of the plan, more then 3,000 acres of country’s land has been cultivated with Jatropha Curcas, which is a drought resistant plant and requires minimal water to be planted at marginal and barren land such as coastal areas of Sindh and Balochistan, which are ideal places for its plantation.
<br /> As for as testing proofs are concerned, the testing of Jatropha seeds was carried out in-house as well as in coordination with Pakistan Council of Scientific and Industrial Research (PCSIR). As a result, the data reveals that oil content in Jatropha seeds remains in the vicinity of 27 percent to 35 percent depending upon the area and quality of seeds.
<br /> There is no additional infrastructure requirement for petro-diesel marketing but distinguished blended diesel needs separate dispensers and storage tanks would be installed at the outlet.
<br /> Bio-fuel is considered as the most environment-friendly fuel as data reveals that blended bio-diesel reduces SOx, NOx and particulate material. Additionally emissions form engines running on bio-diesel have also been tested and found to have reduction in emissions.
<br /> Officials said that the state-owned oil marketing company has chalked out its strategy to explore the indigenous resources through all possible means including bio-diesel production and its plants.
<br /> The company has set up a department called ‘New Business Development’ with a mandate of identifying and taking initiative in terms of cheaper renewable or alternate energy projects, which will lead towards bridging the energy gap, they added.
<br /> The government has shown its keen interest in promoting bio-diesel culture, in this regard, National Bio-Diesel Programme has also been launched while investment-friendly policies are also being placed. As per Federal Board of Revenue’s SRO No 474 (I)/2008 dated May 21, 2008 all imported plants, machineries, equipments and raw materials for use in production of bio-diesel shall be exempted from customs duty, income tax and sales tax.
<br /> Pakistan’s total area comprises of 80 million acres, out of which only 34 percent is being used for agriculture purpose in spite of being an agriculture focused county.
<br /> This project would result in effective utilisation of country’s marginal or barren land. In order to meet 10 percent blending of bio-diesel with country’s demand, there is a need to produce it around 800,000 tonnes per annum.
<br /> Therefore, the bio-diesel will provide investment opportunities not only to big investors but those with lands and associated with agriculture. Besides the project will generate thousands of employment opportunities countrywide in the particular sector of bio-diesel production.
<br /> Source: Daily Times
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